2022-2-9 18:12 |
On Monday, Bitcoin and Ethereum continued to lead other cryptocurrencies in a spirited surge, entering the third bullish week amid FED-induced uncertainty.
As of writing, Bitcoin continues to gain strength after slicing through $40,000 and has since reclaimed $43k after gaining roughly 30% in the last two or so weeks. On the other hand, Ethereum continues to shine days after bouncing off $2,188 and is currently trading above $3000, a key support zone.
Other cryptocurrencies such as MATIC, ADA, and XRP continued to radiate strength with most of them gaining over 30% in the last 14 days. Newer coins have been the largest movers with assets such as WHIVE gaining as much as 800% in the past 24 hours thanks to the high volatility associated with weekends.
That said, albeit Bitcoin losing a substantive part of its correlation strength, most of these assets remain attentive to its price movements and are expected to keep following Bitcoin’s trajectory at least in the foreseeable future.
The wild volatility exuded by Bitcoin in the past two or so months has not however come as a surprise. With the Federal Reserve scrambling to regain control over the inflation narrative, cryptocurrencies have been thrust into the limelight, with more people buying digital assets in a bid to avert further damages by inflation.
With the latest message by the FED signaling the presence and possible continuation of high than expected inflation digits until rate hikes start to pick up pace in March, cryptocurrencies and stocks seem to have regained their ground after month-long drawdowns and have been strengthening, at least for now.
Later this week, the U.S. Bureau of Labour Statics is expected to release the Consumer Price Index (CPI) report which will be a key pointer to inflation figures. The latest release showed that Inflation surged by 7% in 2021, a trend that experts believe will subsist this week, especially with global oil prices spiraling.
The FED is also expected to release its Monetary Policy Report on Friday. Chair Jeremy Powell is also expected to give a status update on the board’s plan to raise interest rates later in March amid an already squeezed calendar that seeks to raise rates at least four times this year. These disclosures will be key determinants of how investors view markets for the rest of the year after battling with a call by the FED that inflation was “transitory” for far too long.
Although some spectators are counting on positive reports this week as being a “hawkish pivot” for the dollar, others believe that cryptocurrencies will continue to strengthen, even after interest rate hikes next month until the FED achieves its 2% inflation target.
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